Hennes & Mauritz: Helped by costs, but customer re-engagement still elusive

Research evidence excerpt

Hennes & Mauritz: Helped by costs, but customer re-engagement still elusive

J P M O R G A N Europe Equity Research

26 June 2026

Hennes & Mauritz Underweight

HMb.ST, HMB SS

Helped by costs, but customer re-engagement still Price (25 Jun 26):Skr166.15

elusive Price Target (Nov-27):Skr114.00

H&M reported mixed Q2 26 results yesterday (our first take here). There was a European General Retail

ACclear EBIT beat, but driven by opex. Indeed, despite numerous structural initiatives Georgina Johanan, ACA

in recent years, and the launch – now almost two years ago – of a new brand (44-20) 7134-5791

direction, the top line remains lackluster. We therefore see few signs of improving georgina.s.johanan@jpmorgan.com

customer engagement. Management referenced that tighter inventory had J.P. Morgan Securities plc

impacted availability in the period. Indeed, this is precisely the balancing act that Fiyin Durojaiye

Inditex has built its model to optimize. In contrast, we struggle to see how H&M’s (44-20) 3493-0455

fiyin.durojaiye@jpmorgan.com

slower and less agile model can drive materially improved availbility without J.P. Morgan Securities plc

introducing greater markdown risk. We are also mindful of some near-term

Shailja Maskara

operational risks, including upcoming SAP upgrades and warehouse roll-out. The (91-22) 6157-3318

better opex trends, combined with FX, drives a c.5% increase to our FY 26 EBIT shailja.maskara@jpmchase.com

forecast. However, with the top line struggling to achieve consistent growth, we J.P. Morgan India Private Limited

remain UW.

Specialist Sales contact details:

• Topline still lacklustre... We acknowledge that H&M has made some Olivia Petronilho - Specialist Sales -